Imagine picking up a bottle of shampoo at the store for $9.99, while the shopper behind you pays just $6 for the same item. This is not due to a coupon or sale, but because artificial intelligence has determined that you are willing to pay more. This concept, known as surveillance pricing, has sparked a debate about its potential use.
What is Surveillance Pricing?
Surveillance pricing refers to the practice of using artificial intelligence to estimate what each individual shopper is willing to pay for a product. This is made possible by the vast amounts of data collected through loyalty programs, shopping apps, online purchases, and browsing history. Critics worry that this data could be used to personalize prices, potentially leading to some shoppers being charged more than others.
The technology behind surveillance pricing is not hypothetical. At the Consumer Electronics Show, a demonstration showed AI recognizing and analyzing people as they walked past a booth, illustrating the advancements in these systems. Modern AI can estimate a person’s age, recognize repeat visitors, analyze shopping patterns, and combine these observations with other data.
Digital Shelf Labels and Surveillance Pricing
The growing use of digital shelf labels has also brought attention to this issue. Retailers like Walmart and Target have begun replacing traditional paper price tags with electronic displays that allow prices to be updated quickly and remotely. While these companies claim that the technology is designed to improve efficiency and inventory management, critics point out that it could potentially be used to personalize prices for individual shoppers in the future.
Currently, there is no evidence that retailers are broadly charging customers different prices based on facial recognition or personal characteristics. However, the Federal Trade Commission has launched an investigation into surveillance pricing, examining how companies use consumer data when setting prices and making offers. Lawmakers in dozens of states are also considering legislation to regulate or limit the practice before it becomes widespread.
Supporters argue that AI could create more personalized shopping experiences and deliver better discounts to consumers. Critics, on the other hand, worry that it could lead to some shoppers being charged more simply because an algorithm believes they will pay it. Four states – Maryland, Connecticut, Colorado, and New York – have already passed laws banning or restricting surveillance pricing.
Original reporting: KTBS 3 (Shreveport) — read the source article.
